The age-old question has been which is more important to a business - cash flow or profitability? Well, they do go hand in hand, but poor cash flow might eventually result in your losing vendors, suppliers, and lenders, which can severely damage your business. Of course, the most important thing for any small business manager or operator is remaining financially solvent and flexible. Having or opening an accounts receivable (AR) line of credit comes in handy and can help maintain a healthy cash flow. Here's how AR benefits your company and why opening a credit line with FreightCenter will help your business in the long run.
Improved Cash Flow
The four seasons of freight shipping are well-known in the logistics world. It's essentially the ups and downs the general supply chain faces as the year goes on. Some quarters of the year are busy for specific industries, and others are busy for everybody! Between the constant fluctuation of the general freight economy and adding in an even greater level of uncertainty in the market nowadays, improved cash flow is more important than ever to your company's health.
AR benefits your company by improving cash flow all year round. You have bills and expenses to pay no matter what happens around you, and you don't want to fall behind on them or take out loans or credit cards that get you in even deeper trouble.
The actual flexibility benefits of an AR line of credit comes from how you repay the money you use. Opening a line of credit means you can put financial resources into the business areas you feel are most needed. Loans lock you in, so you must meet a specific requirement at a particular time. AR lines of credit mean you can pay more back when business is booming and slow it down if needed to match the performance of your revenue numbers.
Pay for Important/Emergency Expenses
Expanding further upon the improved cash flow and increased flexibility benefits of an AR line of credit, these two things mean something that significantly benefits your company. You can pay for any emergency expenses that arise without worrying about how to pay them back like a traditional loan.
If you need money for something quick or urgent, you can go right into your line of credit without digging a larger financial hole. You can then focus on other parts of your business that you need to tend to with your full attention. And that is the key function of an AR line of credit; you have a backup safety net you can modestly indulge in with peace of mind to care for costly upfront needs.
An AR line of credit doesn't break the bank and allows your company to improve scalability. Most of these lines of credit have lower interest rates than things like credit cards and traditional loans, and you can keep them low by paying on time and building a solid credit history through them. And your business will be more cost-effective in the long run by utilizing the flexibility to pay vendors or other expenses accordingly during challenging times.
Open an AR Account with FreightCenter Today
FreightCenter is now making it even easier to build business credit and improve cash flow with a FreightCenter Accounts Receivable line of credit. FreightCenter reports to all major commercial credit bureaus, which helps you establish a positive business credit history. Position your company for growth today with a FreightCenter AR line of credit.
It's easy! If you are an existing FreightCenter customer, log into your MyFreightCenter account. If you are new to FreightCenter, create your account here. On your dashboard/account page, open the online application form and complete it. Once you submit your application, you will receive an email in 24-48 hours with the status of your application. No personal credit checks. No personal guarantees. No annual fees. No interest when paid in full by the due date.